Needham & Company Cuts Price Target on Fortinet (FTNT) Following 3Q Preannouncement
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Needham & Company maintained a Buy rating on Fortinet (NASDAQ: FTNT), and cut the price target to $41.00 (from $42.00), following the company's 3Q preannouncement. FTNT lowered expectations for revenue and EPS. New revenue guidance is $311-316M, vs. $319-324M and below consensus estimates of $322M. EPS guidance of $0.15-0.16 is below previous $0.17-0.18 guidance.
Analyst Scott Zeller commented, "FTNT negatively preannounced F3Q16 (September) with lower than expected billings, revenue, and EPS. Recall, there were signs of stress in the JuneQ, namely service provider weakness, discounting pressure, higher DSO, and complications related to the North American sales reorganization. The company cited the reorg as the main culprit for underperformance for SeptQ, with North American Enterprise and Service Provider accounting for most of the shortfall. We note that going into the news, shares closed at $34.09, or 3.1x EV/CY17, suggesting low expectations as we go into earnings. Shares indicated down to around $30, which is 2.7x our lowered EV/CY17 revenue. We believe FTNT remains a good value idea in security given the valuation, its attractive 20%+ billings growth. Maintain BUY, new target $41."
Shares of Fortinet closed at $34.09 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesNeedham & Company, Earnings
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